Nikkei Regains Some Stability As Yen Slips

Japan’s Nikkei was up slightly on Tuesday trading as investors seize the opportunity by buying recently battered stocks. The index did gain some stability today after prolonged volatility over the past few days. The Japanese index was up 169.33 points to 14,311.98, after sliding by 3.2 percent on Monday.

According to the experts, the frenzy resulting from the futures trade seems to be over. However, the volatility over the last week did raise questions on the sustainability of the remarkable bull-run that help the stock hit the five and a half years high.

Nikkei, last week show

Last Thursday, Nikkei in its biggest loss percentage wise in a single day since March 2011, lost 7.3 percent. The Thursday fall was primarily due to weak manufacturing data from China and concerns over withdrawal of the QE by US Federal Reserve. China is Japan’s second-biggest export market.

Equity still popular

Japanese equities are still quite popular among investors, and popularity has also been contributed by the measures taken by government and central bank to pull back the economy from the earlier decade old mistakes.

“Japanese stocks’ fundamentals have not changed, and sentiment in the long-term on Abenomics is intact,” said Naoki Fujiwara, a fund manager at Shinkin Asset Management.

Despite the last week loss, this year Nikkei is up 38 percent. Since April 4, at a time when Bank of Japan revealed massive reforms to boost growth, the index has gained more than 15 percent.

Yen slipped

Yen showed some strength in the past few sessions, primarily due to the safe-haven bids and also many investors closed their position in the currency to offset the equity losses. Yen pulled back on Tuesday, with US dollar gaining 1 percent to 101.95 yen from the two-a week low of 100.66, on Friday.

“We are bearish yen for the year… but near term we are concerned that the risk-off sentiment can extend further and so the yen can strengthen in the very near term,” says a currency strategist at Societe Generale SA (OTCMKTS:SCGLY) (EPA:GLE) in London.

Gains made by important tickers

A Toyota Motor Corporation (NYSE:TM) gained 4.2 percent on Tuesday, and was the second most traded stock by turnover. Mazda gained 6.5 percent while Mitsubishi was up 14 percent. Another heavily traded stock, Sony Corporation (NYSE:SNE) was up 3.2 percent. Industrials stocks also registered gains with Toshiba rising 5.1 percent while SMC Corp gained 4.3 percent and Mori Seiki Co was up 7.8 per cent.